§ 3-407. ALTERATION.

(a) "Alteration" means
(i) an unauthorized change in an instrument that purports
to modify in any respect the obligation of a party, or
(ii) an unauthorized addition of words or numbers or other change to an incomplete
instrument relating to the obligation of a party.

(b) Except as provided in
subsection (c), an alteration fraudulently made discharges a party whose
obligation is affected by the alteration unless that party assents or is precluded
from asserting the alteration. No other alteration
discharges a party, and the instrument may be enforced
according to its original terms.

(c) A payor bank or drawee paying
a fraudulently altered instrument or a person taking
it for value, in good faith and without notice of the
alteration, may enforce rights with respect to the instrument (i) according
to its original terms, or (ii) in the case of an incomplete
instrument altered by unauthorized completion, according to its terms as
completed.